Motivation Theories and Practices for Southwest Airlines

Transcript of Motivation Theories and Practices for Southwest Airlines

Individual Needs and Motivation
Motivation accounts for the level direction, and persistence of effort expended at
work.
A highly motivated person works hard at a job while an unmotivated person does
not.
One of the responsibilities of the manager is to create an environment that has
conditions that properly motivate the employee to strive for excellence.
Needs are an unfulfilled physiological or psychological desire.

Motivation Theories and Practices for Southwest Airlines

Southwest Airlines motivates its employees by creating a system of rewards known
as "Kick Tails."
The Kick Tail Program is both a recognition and incentive program at Southwest
Airlines. Employees can recognize one another with a Kick Tail in appreciation for
“Living and Working the Southwest Way.”

Hierarchy of Needs Theory

Southwest Airlines prides itself on having employees who are happy to work for the
airline. This is due in part to the emphasis the company puts on highlighting
achievements of its employees, through monthly Spirit Magazine that can be read by
passengers aboard every flight.
ERG Theory
Existence needs are desires for physical well-being.
Relatedness needs are desires for good interpersonal relationships.
Growth needs are desires for personal growth and development.

To Our Employees:
We are committed to provide our Employees a stable work environment with equal
opportunity for learning and personal growth. Creativity and innovation are
encouraged for improving the effectiveness of Southwest Airlines. Above all,
Employees will be provided the same concern, respect, and caring attitude within
the organization that they are expected to share externally with every Southwest
Customer.

Two-Factor Theory:
As job dissatisfaction increases, hygiene quality goes down. There are times when a
Southwest Employee may experience an unexpected transition in their career path
and seeking a different position. If their current position is being eliminated, not a
good job fit, or can no longer perform the requirements of the current job,
Southwest offers a Career Transition Resources (CTR) placement program.

Acquired Needs Theory:

Need for achievement:
Is the desire to do something better to solve problems or to master complex tasks.
Need for power:
Is the desire to control influence or be responsible for other people.
Need for affiliation:
Is the desire to establish and maintain good relations with people.
Process Theories of Motivation:
Equity Theory
Based on the idea that all people want to be treated fairly in comparison to others
Comparison of outcomes-to-inputs ratio of others determines a person’s behavior
based on his/her perception.

Southwest Airlines Profit-sharing

Southwest Airlines employees will split $228 million in profit-sharing based on the
carrier’s record earning
Southwest also contributes to 401(k) retirement plans for employees and about $580
million in health care, wellness and other benefit programs.
"The hard work of our people and the pride and ownership they take in providing
outstanding customer service has resulted in four decades of profitability”-
Southwest CEO Gary Kelly

Over-Reward Inequity vs. Under-Reward Inequity

Over-Reward Inequity: Individual perceives that rewards are more fare than what is
fair for work inputs.
Under-Reward Inequity: Individuals perceives that rewards are less than what is fair
for work inputs.
Equity Sensitivity: Reflects that people have different preferences for equity and
react differently to perceptions of inequity.
Expectancy Theory-Goal Setting Theory
Goal Setting: Is the development of an action plan designed to motivate and guide a
person or group towards a goal.
Set Specific Goals (General goals are weak)
Set Challenging Goals– Higher performance
Goal Acceptance/Commitment (forced goals become resisted)
Clarify Goal Priorities (clear expectations [what is accomplished first and why])
Provide Feedback on Goal Accomplishment – acknowledge goal accomplishment
Reward Goal Accomplishment – reward people for doing what they set out to do
Southwest Airlines helps new employees set personal goals, visions and aspirations
through the New Employee Orientation Handbook, which asks employees to “tell
their story” and how they will reach/live their legacy.
Southwest Airlines has a “Perfect Attendance Program” which can reward employees
with incentives such as extra days off and gift cards to various outlet stores.

Self-Efficacy Theory
Self-Efficacy: is a person’s belief that they are capable of of performing a specific task. Bandura
described these beliefs as determinants of how people think, behave, and feel.

Reinforcement theory: states that human behavior is defined by its environmental

consequences instead of looking inside the individual to explain motivation the
theory focus on the external environment and its consequences.
Law of effect: states that behavior is followed by pleasant consequences and likely
to be repeated while unpleasant is not.
Operant Conditioning: is the process of applying the law effect to control behavior
by manipulating its consequences
Continuous Reinforcement reward for each time the person a desired behavior
occurs Southwest Awards for this would be the Winning Spirit award.
Intermittent Reinforcement reward behavior only periodically Southwest awards
would be Employee of the month and Spirit Star of the month also perfect
attendance.
Law of Contingent Reinforcement is a reward is given when desired behavior occurs
this would be Winning Spirit award
Law of Immediate Reinforcement is a reward that should be given soon as a desired
behavior occurs for southwest this award would only be Heroes of the Heart award.

Motivation and Job Design

Job Design:
Is arranging work tasks for individuals and groups
Job Enrichment:
Increases job depth by adding work planning and evaluating duties normally
performed by the supervisor.

Alternative Work Schedules

Flexibility:
Gives employees some choice in daily work hours.
Compressed workweek:
Allows a full-time job to be completed in less than five days.
Job sharing:
Splits one job between two people.
Telecommuting:
Involves using IT to work at home or outside the office.
The Motivation and Practices Theories are methods that managers use to increase
employee morale, confidence, and competence which in turn increases employee
productivity within any company.
To Our Employees

We are committed to provide our Employees a stable work environment with equal opportunity for
learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness
of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring
attitude within the organization that they are expected to share externally with every Southwest
Customer.

The Mission of Southwest Airlines

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with
a sense of warmth, friendliness, individual pride, and Company Spirit.

Expectancy Instrumentality Valence

ABSTRACT
In this cut throat competiti ve era ser vic e fir ms may sur vi ve with i nnovati ve s trategies with
refer ence to peopl e, proces s and physical evi denc e that differ entiate their s er vices from their
competitors.
The key objecti ve of this paper is to highlight the strategies of Southwes t airlines that
facilitated it to produce a successful model in airlines i ndus tr y that was benc hmark for the
entire world. Paper enlightens that if a s er vic e fir m gi ves priority to its employees than
customers , it automaticall y ser ves cus tomers i n better way as s er vices of a c ompany are gi ven
through employees and employees’ delight is c ustomers’ delight in ser vic e s ector

In this cut throat competitive era service firms may survive with innovative strategies with

reference to people, process and physical evidence that differentiate their services from their

competitors.

The key objective of this paper is to highlight the strategies of Southwest airlines that

facilitated it to produce a successful model in airlines industry that was benchmark for the

entire world. Paper enlightens that if a service firm gives priority to its employees than

customers, it automatically serves customers in better way as services of a company are given

through employees and employees’ delight is customers’ delight in service sector

Introduction

The basic concept in marketing is marketing mix that is composed of four P’s; product, price,

place and promotion. Key strategic decisions related to these four P’s determine success of any

firm. However, strategies for the four P’s require some modifications when it is applied to

services. Because services are usually produced and consumed simultaneously, customers are

present in service firm and are actually part of service production process. Also, because

services are intangible, customers seek any tangible indication to help them understand the

nature of service experience. Acknowledgement of the importance of these additional

communication variables has led services marketers to adopt the concept of an expanded

marketing mix for services. In addition to the traditional four P’s, the services marketing mix

includes people, process and physical evidence. These new elements (people, process and

physical evidence) may decide the success and failure of any service firm because any or all of

them may influence the customer’s initial decision to purchase a service, as well as the
ABSTRACT

In this cut throat competitive era service firms may survive with innovative strategies with

reference to people, process and physical evidence that differentiate their services from their

competitors.

The key objective of this paper is to highlight the strategies of Southwest airlines that

facilitated it to produce a successful model in airlines industry that was benchmark for the

entire world. Paper enlightens that if a service firm gives priority to its employees than

customers, it automatically serves customers in better way as services of a company are given

through employees and employees’ delight is customers’ delight in service sector.

Dr. Ashutosh Muduli

Ms. Vinita Kaura

Southwest Airlines Success :

A Case Study Analysis

customer’s level of satisfaction, repurchase decisions and word of mouth publicity. Southwest
airlines is the best example for explaining the importance of people, process and physical evidence
in the success of service firm. Southwest model made it seventh largest US airline by 1993. It created a
winning model for profits in Airline industry. According to Money magazine, Southwest’s stock

performance was the best performance in the Standard and Poor’s 500 during that time.

This paper presents its strategies with respect to people, process and physical evidence that

helped it to achieve this marvelous success.

Model of Southwest airlines :

Southwest airlines was founded in 1967 by Rolling King and Herb Kelleher. It started its operation in

1971 covering intrastate Texas cities, Dallas, Houston and San Antonio. The airline’s new president,
Lamar Muse, adopted the “love” theme for attracting the attention of passengers as it was based at
Love Field in Dallas. For executing the “love” theme, lots of efforts were made. Drinks served on board
were called “love options”, ticket machines were called “love machines”, and cabin hostesses were
sexy and had seductive voices.

Their low cost fares were below than the cost of driving a vehicle over the same route. Southwest’s
policy of pricing its service was to compete with auto travel. After its inception, it achieved break even in
two years. Baniff international, one of the Southwest’s principal competitors initiated a 60-day “half-
price sale” of tickets between Dallas and Houston, offering tickets at $13(below than cost) as opposed
to Southwest’s $26 fare. Southwest’s counter strategy was an ad proclaiming that “nobody is going
to shoot Southwest out of the sky for a lousy $13”. They offered an unusual alternative to stomers
that they could ask to pay either $26 or $13 for exactly the same seats on Southwest flights.
Customers who were purchasing $26 tickets were rewarded with gifts such as ice buckets or fifths of
whisky. This strategy worked and 80% of customers requested for $26 tickets. In 1993, southwest
acquired Morris Air, hence increased number of operating stations.

Southwest’s strategy was to limit the markets served and provide high frequency departures each day
to a given destination. The intensity of this schedule reduced the consequences of a missed flight
and enabled Southwest to retain tardy passengers.

Southwest’s strategy, “fly eight flights, get one free” was the simplest in the industry.

People :

All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely,

the firm’s personnel, the customer and other in the service environment. Flexibility at work place,
recognition and appreciation for outstanding performance as well as for the length of service, group
decision making, team building approach, training, profit sharing, stress on positive attitude rather
than skill, taking home satisfaction than salary, low labour turnover and involving customers in
process were some of the attributes that helped Southwest airlines to achieve success.

Employees : In Southwest airlines, employees were given the latitude to do whatever is necessary to
get a plane turned around in the targeted time of 15 minutes. There was emphasis on fun for
employees and travelers. Ground and In-flight employees were encouraged to be creative in the way
they delivered required announcements to the passengers. Some employees sang the messages, others
delivered them in dialect (such as an Arnold Schwarzenegger-like “you will sit back. You will relax. You
will enjoy this flight. Hasta la vista, baby”) or in Donald Duck-speak. Company’s main event of the year
was the annual awards banquet, for which employees from all over the system were brought to Dallas
and honored for their length of service.

In addition, the culture committee sponsored a hero of the heart celebration at headquarters on
February 14 each year. Awards were made to groups nominated by others in the organization that had
gone “above and beyond” to deliver Southwest service.

Joint problem solving was the culture of Southwest airlines. Southwest engaged in joint problem-
solving exercises with those supplying everything from fuel to peanuts served on planes. Team work was
the spirit of this organization. Works were assigned in groups.

Failure to do so according to schedule resulted in a “team late”. Rather than assessing individual

responsibility, teams were then tasked to figure out how to avoid problem in the future.

Pilots sometimes handled baggage or helped cabin attendants in picking up the cabin while gate

attendants might be seen putting provisions on board for the departing flight. The main spirit was to
do everything that was required to complete a task rather than having mentality that it is not my job.
Southwest Airlines looks for the people who can think in terms of we rather than me. One way the
company assesses these service inclinations is by interviewing potential flight attendants in groups to
see how they interact with each other. Pilots are also interviewed in groups to assess their teamwork
skills, a critical factor above and beyond the essential technical skills they are required to possess.

Throughout the organization, stress was placed on the value of “family” in the organization.

All ground operations employees had one to two weeks of technical orientation at individual stations
before going to class in Dallas for a week to study everything from the use of the company systems
to the organization’s values. Southwest’s employees’ total compensation was roughly equivalent to
other airlines but productivity of Southwest employees was more and it led to decreasing cost of
Southwest airlines.

After completion of six months probation period, all employees became members of Southwest’s
profit-sharing plan.

Southwest operated on some basic principles; focus on the situation, issue or behavior, not on the
person, maintain the self-confidence and self-esteem of others maintain constructive relationship with
your employees, peers and managers, take initiative to make things better and led by examples.

One of the Southwest employee stated that most enjoyable thing about his job is coming to job

everyday. A quote from Southwest’s president, Herb Kelleher,illustrates the importance of selection
of right person. “ the People Department (name given to Human resource Department by
Southwest) went to Herb Kelleher, one day and said, ‘We have interviewed 34 people for this ramp
agent’s position, and we are getting a little worried about the time and effort and cost that is going into
it’. And he said if you have to interview 154 people to get the right person, do it.”

Southwest’s management used to host “best practice” teams from all industries that wanted to discuss
hiring, training, and employee- relations practices. After some time it discontinued this practice as it was
devoting too much time, energy, attention and resources educating the outside world. So, he thought to
devote that time, energy, attention and resources internally on enhancing and enriching their own
culture Customers : On early flights, passengers who could produce the largest holes in their socks
were recognized and rewarded. In-Flight contests were conducted to see how many passengers could
be fitted into the bathroom at one time. Holidays were celebrated with costumes and giveaways.

The interview team often included frequent-flier customers as well, particularly when customer-
contact were being selected. When a frequent flier was asked that why will he take off time from his
organization to spend time hiring Southwest employees, he replied, “I might learn something and have a
little fun doing it. And besides, it’s my airline.”

Southwest airline was dependent on customers to perform critical service roles for themselves,
thus increasing the overall productivity of the airline. Passengers are asked to carry their own
bags when transferring to other airlines, get their own food and seat themselves.

Process :

The environment in which the service is delivered and where the firm and customer interact, and any

intangible components that facilitate performance or communication of the service.

Frequent trips, direct flights rather than Hub and Spoke system, not assigning any seat to
passengers, family work culture, flying only Boeing 737 jets, choosing un-congested airports,
selling tickets through internet made the process quick, efficient and convenient for customers.

Southwest’s frequent departures provided opportunity to frequent business flyers to catch a later flight
if they missed one. It used direct flights rather than Hub and Spoke system. It indicates user-friendly
process.

It didn’t assign any seats to passengers. It issued colorful reusable plastic cards numbered 1 to
30. Passenger who came first could take seat of his choice, thus provided an incentive to early
arrivals. This process of assigning seats eliminated the time-consuming reconciliation of the double
assignment of seats on full flights and allowed Southwest agents to keep the plane doors open for last
minute arrivals at the gate. The airline didn’t transfer baggage to connecting flights on other airlines
and didn’t provide food in flight.

In all, the process was very efficient, standardized and low-cost, allowing for quick turnaround and low
fares. Customers were part of process and taking their roles willingly. For distribution of tickets,
earlier commission was given to travel agents but later it implemented “ticketless” (paperless)
travel program and later the development of Southwest.com as a means of using the internet to
sell travel directly to customers. It lowered down distribution cost.

Southwest’s turnaround time had grown to an average of 24 minutes, a figure that was expected to be
atleast 30 minutes. It was a benchmark for entire airline industry. For this success, the factors
that were responsible, were; an absence of meals on all Southwest flights, a limited amount of
checked luggage on Southwest’s typically 60- to 90- minutes flights, a near-uniform configuration for all
of its 737 aircraft, a team-oriented approach to ground services with team measures for turning
around planes and employees freedom to do whatever necessary to get a plane pushed off on time and
a high speed boarding process.

Physical evidence :

The actual procedures, mechanisms and flow of activities by which the service is delivered- the
service delivery and operating systems.

Southwest worked more on low cost model, fast process and people than physical evidence but
still physical evidence attracts attention of people. Southwest’s aircraft are orange and mustard brown
and accentuates their uniqueness and low-cost orientation.

The walls of the three-story building were covered with literally thousands of framed photos and
awards, many of them showing southwest employees in their party cloths ranging from black tie and
formals to jeans. Others portrayed employees engaged in community activities together in their free
time, often at Ronald McDonald houses for children across the country. Some of the framed photos
included Kelleher, one of the founders, who had gained fame for his unorthodox but effective style of
leadership.

Employees dressed casual as well as formal, wearing shorts in the summer showed fun as well as
employee comfort. The reusable plastic cards also provided physical evidence that signals low cost
and no frills to customers. Southwest’s website also provides tangibility to its services.
Conclusion

Services are variable, inseparable, intangible and perishable. These unique characteristics impose

challenges for service firms to overcome. There are different strategies to beat these
characteristics.

Services are variable by nature as different people of same designation deliver services of different types
and same person provide different types of services at different times. This problem can be
overcome by training of employees and customers. Inseparability of production and consumption
makes consumer part of service process so their active participation, employees’ enthusiasm, easy
techniques make effective and efficient process.

Providing physical evidence through website, brand name, colour, logo, uniform etc help a service firm
to overcome the problem of intangibility. It is evident from analysis of Southwest airlines that
effective strategies related to people, process and physical evidence help a company to overcome
some of its characteristics and thus achieving success.

References

1. James L. Heskett, 2002 Southwest Airlines: An

Industry Under Siege

2. Zeithaml A. Valarie, Bitner Jo Mary, Services

Mrketing: Integrating Customer Focus Across

The Firm, Tata Mc Graw Hill, Third edition

3. www.southwest.com